Qantas is one of Australia’s most prestigious brands. It is the national airline. It has had an extremely high-profile and enjoys the reputation of being one of the safest airlines in the world (It also trades off this fact). Aussies have had a national love affair with Qantas over the years. Its logo is also one of Australia’s national symbols and many consider part of their national identity.
Today Alan Joyce and the executive management of Qantas just ended that love affair and mauled the airline’s brand equity and it’s reputation in one day.
While there is a clear industrial relations strategy in play here from Qantas. Here are some reasons why the management have made the wrong move from a public relations, reputation management and marketing perspective:
1. People can see through spin and cynical timing (It’s a self-inflicted PR disaster of epic proportions)
Qantas claim that they only met on Saturday morning to ground the airline which according to politicians and Qantas pilots association wouldn’t be possible. The Qantas pilots representative claimed that Qantas has been booking out hotel rooms for some time in preparation for this. To make announce their decision to ground the airline only a day after their annual general meeting where Mr Joyce received a significant pay rise sends a terrible message to the Australian public. It smacks of cool calculated timing to avoid any push-back from institutional investors. Australians will see straight through this and Qantas are immediately with their backs to the wall in the PR battle with the unions. Where once there was public ambivalence at the union claim, the sentiment has changed. The majority of public sentiment is now with the unions. That is a PR disaster.
2. Good news travels fast, bad news travels at the speed of light (It’s a word of mouth disaster)
It is being reported that domestic 68,000 passengers are affected every day by the grounding and over 13,000 international travellers. That is 81,000 people who now that are either trying to re-book their flight with another airline or some of whom are stuck somewhere around the world in a hotel room waiting for another flight or a rescheduled Qantas flight. I’ve written about the power of word of mouth before Word of mouth marketing can work for you but it can also work against you if the sentiment is negative. Just imagine the 81,000 people telling their closest nearest and dearest friends (lets say that is 4 people each), that would be over a quarter of a million people who would have been told about their negative experience every single day.
There was also a social media meltdown on Twitter yesterday. Qantas accounted for 0.64% of global Twitter traffic yesterday which is massive. Sentiment towards the company was 72% negative and 28% positive.
Here is one sarcastic play on the Qantas advertising jingle I saw on Facebook this morning:
“I’ve been to airports that never close down,
From New York to Rio and old London town,”
Alan Joyce’s personal branding is also going to take a hit if he doesn’t resolve this quickly by making even more money for the Qantas shareholders and restore confidence from key stakeholders including government. Here is what could be at stake if Mr Joyce fails in his Industrial Relations efforts. Who would employ a CEO that would take down their own brand?
3. It takes years to build your reputation and a moment to lose it.
As I wrote in the introduction to this post the Australian public has had a love affair with the Qantas over the decades. The airlines brand equity is very high. There is a strong loyalty to the brand. There is also a deep emotional connection with the brand. Australians also have a high sense of ownership of the brand, even if they don’t own shares, they consider it ‘one of us’. These are precious attributes that takes years to develop. The Qantas executive team has just lost years of brand equity in one day.
4. Give your struggling competition a free kick
Qantas needs to get ready to lose market share. This is the real damage. Lost business. This could be Alan Joyce’s Crocodile Dundee moment: “That’s not how you lose market share. THIS is how you lose market share!” The other airlines must be licking their lips in anticipation of increased revenue. Virgin has had a tough time of late with Jetstar taking a lot of their market share. If I were the marketing team of Virgin I would ensure that every traveller would receive something special over the next week to win the hearts of the frustrated travellers. Such an easy marketing win.
Qantas may win the battle but they may lose the war.
This is a risky strategy (some would say gutsy) Qantas are undertaking. They are fighting an industrial relations battle with different unions who are attacking them one by one. Death by a thousand cuts. Qantas are looking to force the Federal Government hand to stop all industrial action in one fell swoop (which the government can do). Qantas may win the IR battle but may lose it’s brand equity, public relations and reputation management battle in the process. More importantly Qantas will also lose the public’s loyalty and a massive slice of the market share in the process.
Are you a Qantas customer? What do you think about what they have done? Comment below.